AXA Bets on Tech to Manage Ballooning Insurance Costs

As natural disasters grow in frequency and severity, the cost to insurers is becoming unsustainable. Global insurance giant AXA is using artificial intelligence (AI), internet of things (IoT) and digital twins to manage claims without pulling out of the market.

Pierre du Rostu, CEO of AXA’s Digital Commercial Platform, said the Los Angeles wildfires in January cost $300 billion in damage alone.

“There is no way insurance can cope with events of this size,” du Rostu said at the recently held Viva Tech 2025 conference in Paris.

“Over the past 30 years, the number of events above $1 billion in terms of losses has been multiplied by 20. The total economic losses related to climate change has been multiplied by four since 1985,” du Rostu added.

The problem extends beyond climate disasters.

“The number of claims related to political risks has grown by 300% in the last two years,” du Rostu said, with more than 40% of global companies reporting stranded assets. Cybercrime costs are also soaring. He said this year’s losses are at an estimated $1.5 trillion — more than the combined annual revenue of Google, Amazon and Meta.

According to the National Oceanic and Atmospheric Administration (NOAA), the U.S. had 403 weather and climate disasters from 1980 to 2024 where overall damages topped $1 billion or more. The total cost of these events was $2.92 trillion.

The Growing Gap

One way the industry copes is by reducing what is covered by insurance.

“We call it the insurance gap, which is the difference between what is covered and what is not covered,” du Rostu said. “This gap is growing.”

Rather than leave markets like some competitors, AXA is betting on technology to bridge this gap.

“We don’t want to exit markets. The commitment that AXA has taken … is, ‘let’s invest in new technologies to find solutions to bring prevention at scale for our clients,’” du Rostu said.

AXA is tapping the following technologies:

Geospatial analytics: “You can have 10 or 20 pictures of the same place at different points in time taken by different satellites in less than an hour,” du Rostu said. AXA uses this capability to detect risk factors, model hazards like wildfires, and guide crisis management. For example, satellite photos of the 2024 flood in Valencia, Spain, measured water depth, “so automatically, we are able to tell our clients whether their sites were completely flooded or not.”

Internet of Things (IoT) applications: Predictive maintenance and smart water pipe monitoring are key use cases. “We are able now, at an industry level, to identify whether a machine will fail 45 days before the machine fails,” du Rostu said. With water pipe sensors, he noted that a study showed they reduced losses due to burst pipes by 93%.

Digital twins: The ability to create a virtual replica leads to advanced simulations. For example, Singapore’s airport created a digital twin of the entire airport to simulate scenarios like pandemics, weather-related issues and more. “They are now able to reduce by 30% the downtime of the airport,” he said.

AI ties these technologies together.

“Leveraging AI today, we’re able to combine data to the point that we can run scenarios, generate insights and learn,” du Rostu said. AXA is also exploring agentic AI to automate prevention and response measures.

However, du Rostu said technology alone isn’t enough.

“It’s really important that we combine all this digital experience with the best human expertise. Nothing will ever replace one super expert going on the site.”

Looking ahead, du Rostu described a future where AI and technology could dramatically reduce losses and downtime, from autonomous maintenance dispatches to optimized disaster responses. The irony is that all the tech is already here.

“Everything does exist today,” he said. What’s left is “our ability to take action and to connect the dots.”

Du Rostu urged collaboration across industries.

“We have to work as an ecosystem,” he said. “We have to join the dots between your company and our company. We have to accept to share data. This is the only way for us to be successful.”

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